Allcargo buys 5.97% stake in Gateway Distriparks for Rs29 crore

Allcargo buys 5.97% stake in Gateway Distriparks for Rs29 crore
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First Published: Thu, Mar 12 2009. 05 35 PM IST
Updated: Thu, Mar 12 2009. 05 35 PM IST
Mumbai / Bangalore: Allcargo Global Logistics Ltd has acquired 6.1 million shares, or a 5.97% stake, in rival Gateway Distriparks Ltd for Rs29 crore, an Allcargo executive said.
Sealand Terminals Pvt. Ltd, a unit of Allcargo, bought the shares in the open market from Temasek Holdings Pte Ltd, the Singapore government’s investment arm, he added, after the company made the announcement on Thursday in a notice to the Bombay Stock Exchange. He asked not to be named.
“It is purely a treasury investment and has nothing to do with consolidation,” Shashi Kiran Shetty, chairman and managing director of Allcargo Global, said by phone. “I do not have any plans to increase the stake in Gateway Distriparks. When the bids came up we saw value in this stock since we are into the same business. We have funded this acquisition from our internal accruals.”
However, an analyst with a Mumbai-based brokerage tracking both Allcargo and Gateway said, “You cannot write off the possibility of a consolidation in the future, though nothing is there in the horizon. There is tremendous synergy between both the companies.”
Earlier in March, Shetty had said the company saw acquisition opportunities overseas in the cargo consolidation and shipping service space as well as warehousing. “There are proposals but we are evaluating and negotiating to see whether prices are right.... It will take a little more time. It’s better to wait and watch. I think more pain will come,” he had told Reuters.
Shetty had also warned that Allcargo’s profit after tax in 2009 would be flat or down 15% and revenue down 10% as volumes are expected to fall.
Allcargo, in which private equity fund Blackstone Group LP has a 10.39% stake, is India’s biggest multi-modal transport operator and the world’s second-largest non-vessel owning common carrier.
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First Published: Thu, Mar 12 2009. 05 35 PM IST